A difficult lesson: Government funding shortfalls have weighed on the industry's performance

The Pre-Primary Education industry includes local authority nursery schools, privately funded schools, community organisations and private, for-profit businesses. Although nurseries are essential services for many working parents, the industry is not completely protected from wider economic conditions in the United Kingdom. Industry revenue fell in 2014-15 and 2015-16 as cuts made to government childcare programmes were most severe during this time. Revenue is expected to fall at a compound annual rate of 1.5% over the five years through 2018-19 to reach £3.6 billion, including estimated expansion of 0.3% in the current year. Rising demand from an increased number of working parents was not enough to offset government cuts...read more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24
Market Share of Companies

Industry Threats & Opportunities

  • Cuts to government childcare programmes have weighed on industry revenue performance
  • Government funding has declined in real terms, negatively affecting industry operators
  • Funding shortfalls are expected to weigh on industry profit margins over the next five years
  • Industry Report - Industry Investment Chapter

    The industry has a low level of capital intensity as wages by far outweigh capital expenditure. For every £1.00 spent on capital, industry operators typically spend £23.47 on wages. Wages are the largest expense for nursery schools, and are estimated to account for approximately 75.1% of the average industry enterprise’s revenue through 2018-19. Nursery-aged children require a high level of supervision and so the staff-to-child ratio is higher than that of every other education industry. For children under two years old, there must be one carer for every three children; for two year-olds, the ratio is one carer for every four children; and children aged between three and five years old have a staff-to-child ratio of 1:8. Nur...purchase to read more.

    Additional Insights for the Pre-Primary Education Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Pre-Primary Education Industry are

  • Proximity to key markets
  • Must comply with government regulations
  • Having a good reputation
  • IBISWorld analysts also discuss how external factors such as Female participation rate in the labour force and Public-sector funding for pre-tertiary education in the Pre-Primary Education industry impact industry performance..

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    What's in this report

    What is the Pre-Primary Education Industry?

    Pre-primary education is offered to children up to the age of five to introduce them to a school-type environment before they start primary school. Nursery education, as it is commonly known, is provided by each of the constituent governments of the United Kingdom. The industry includes organised instruction delivered through nursery schools and nursery classes. Programmes offered by child day-care centres and services provided by childminders are excluded from the industry.

    Industry Products
  • Local authority nurseries
  • Privately funded nurseries
  • Community nurseries
  • Private for-profit nurseries
  • Industry Activities
  • Operating nursery schools
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Female participation rate in the labour force
  • Public-sector funding for pre-tertiary education
  • Real household disposable income
  • Demand from child day-care centres
  • Number of births

  • Current Performance
  • Steady demand
  • Public-sector funding
  • Profit squeezed
  • Chart: Revenue Growth

  • Industry Outlook
  • Government funding
  • Growing focus
  • Table: Pre-Primary Education Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Pre-Primary Education Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Book Retailers
  • Furniture, Lighting & Homeware Retailers
  • Newsagents & Stationery Stores
  • Toy Retailing

  • Products & Services
  • Private for-profit nurseries
  • Local authority nurseries
  • Community nurseries
  • Privately funded nurseries
  • Chart: Pre-Primary Education Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Parents in the highest income quintile
  • Parents in the fourth income quintile
  • Parents in the third income quintile
  • Parents in the second income quintile
  • Parents in the lowest income quintile
  • Employers
  • Chart: Major Market Segmentation for the Pre-Primary Education Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitWagesPurchasesOther costs
  • Chart: Cost Structure Benchmarking – Sector vs Pre-Primary Education

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Pre-Primary Education Industry

  • Industry Globalization
    Bright Horizons Family Solutions Ltd,
  • Table: Bright Horizons Family Solutions Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Pre-Primary Education Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Pre-Primary Education Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
  • A plan of activities and lessons that makes up a school year.
  • Early Years Foundation Stage (Eyfs)
  • A government framework for teaching and caring for children aged up to five.
  • Employer-Served Nursery
  • A nursery provided by a company through a contract with a local provider.
  • What Our Customers Say

    Why buy this report?

    The Pre-Primary Education market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Pre-Primary Education:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Pre-Primary Education market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Pre-Primary Education, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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